Budget Deal Reached; Vote Possible by Wednesday

Republicans in Congress presented a plan negotiated with Democrats to steer the U.S. away from defaulting on its debt next week, putting lawmakers on course to stave off a fiscal calamity.

The accord would extend the government’s borrowing authority until March 2017 -- eliminating the danger of a default after Nov. 3 -- and also include a two-year deal on spending, aides from both parties said. House and Senate Republican leaders presented the plan to members Monday night.

“It is a good deal,” said House Rules Committee Chairman Pete Sessions, a Texas Republican. He said the plan would raise spending caps for defense and non-defense programs for two years, though it would keep discretionary spending below 2008 levels.

The agreement wouldn’t eliminate the chance of a government shutdown if lawmakers can’t resolve differences over spending priorities and policy riders by Dec. 11, when current funding expires. Still, "it really dramatically lowers the chances for a shutdown," Representative Tom Cole, an Oklahoma Republican, told reporters.

Second-ranking Senate Republican John Cornyn of Texas said that if the House passes the plan by Thursday, the measure can be sent to the Senate in time for that chamber to meet the Nov. 3 deadline to raise the debt limit and avoid default.

The Obama administration and Democratic congressional leaders were involved in talks on the proposal. Bipartisan support may allow the measure to win approval despite the opposition of members of the House Freedom Caucus, the hardline group of about three-dozen Republicans whose opposition drove Speaker John Boehner of Ohio to resign. House Ways and Means Committee Chairman Paul Ryan of Wisconsin is set to be elected speaker on Thursday.

‘Clean the Barn’

Boehner has said he wants to “clean the barn up” by passing major measures before he leaves. Freedom Caucus member Raul Labrador of Idaho said Monday he would rather Congress pass a short-term debt-limit measure for now and let Ryan handle the larger package later.

How the deal affects the start of Ryan’s speakership “depends on how Paul votes," said Kansas Republican Tim Huelskamp, a member of the Freedom Caucus. “Is he going to support kind of the last, worst deal of John Boehner?"

Cornyn wouldn’t commit to voting for the bill, saying, "No one is going to be popping any champagne corks" over the plan. Nor would Senator Tim Scott of South Carolina, who said the proposed savings it includes wouldn’t be enough to justify extending the debt limit.

The agreement would allow $80 billion in spending above current caps, split evenly between defense and domestic discretionary programs, with $50 billion for fiscal 2016 and the rest in fiscal 2017, said a Republican leadership aide.

Less Domestic Spending

The $80 billion over two years entails less for domestic spending than President Barack Obama had wanted. The spending deal would leave it to appropriators to hash out a detailed plan adhering to the new top-line budget numbers before current funding runs out Dec. 11.

"Everybody is going to listen to it," moderate House Republican Charlie Dent of Pennsylvania said as he left Monday’s meeting. "I can only speak for myself but the outline put forth seems like a way forward."

The urgency of acting to extend the government’s borrowing authority was highlighted by the Treasury Department’s decision on Oct. 22 to postpone an auction of two-year notes. The Treasury said that “due to debt ceiling constraints, there is a risk that Treasury would not be able to settle the two-year note” on Nov. 2.

“There have been some bipartisan conversations on Capitol Hill,” White House spokesman Josh Earnest told reporters Monday. “It can sometimes be a useful strategy to tack the debt limit on” to legislation that is expected to pass.

Treasury Secretary

Treasury Secretary Jacob J. Lew has said Congress must raise the debt ceiling by Nov. 3 or risk default. Federal highway funding authorization also runs out Thursday, and lawmakers are working separately on a short-term measure.

On the spending measure, one proposal would curb a pending 52 percent increase in Medicare Part B premiums that would affect the highest and lowest-income Medicare recipients, said a Republican aide. Those recipients would have a premium increase of about $16 a month, plus a $4 or $5 monthly surcharge, instead of a $54 a month increase, according to the aide.

Premiums for low-income beneficiaries are paid for by states. To override all of the premium increase would cost $8 billion over 10 years, according to estimates cited by aides.

Also being discussed is an effort to shore up the Social Security Disability Insurance fund, aides said.

Support from at least 30 House Republicans would be needed to pass the measure, if all 188 Democrats supported it.

Cole said, "I hope this is something that can get the majority of our conference in support. That is something John Boehner deserves on his way out and that Paul Ryan frankly needs on his way in."